Determinants of entrepreneurs' views on the acceptability of tax evasion and the informal economy in Slovakia and Ukraine: an institutional asymmetry approach

Abstract

In recent years, it has been argued that citizens view tax evasion and the informal economy as socially acceptable when the codified laws and regulations (formal institutions) of a country are not aligned with the norms, values and beliefs of the population (informal institutions). Reporting a 2013 survey of 238 entrepreneurs' views on the acceptability of tax evasion and the informal economy in Slovakia and Ukraine, this paper confirms for the first time this institutional asymmetry thesis with regard to entrepreneurs, revealing that the gap between state morality and entrepreneurial morality has an impact on the acceptability of illegal behaviour. The paper concludes by discussing the theoretical and policy implications.